Disney bets on Pixar-driven park revamp

Lisa Richwine and Ronald Grover, Reuters

Saturday, June 09, 2012, 12:00 AM

article

The Disney California Adventure theme park in Anaheim, a dud since it opened in 2001, will unveil the fruits of a five-year, $1 billion renovation next week.

The Disney California Adventure theme park in Anaheim, a dud since it opened in 2001, will unveil the fruits of a five-year, $1 billion renovation next week -- and there's a lot more riding on the effort than ticket sales.

Disney is counting on the overhauled park to entice visitors at adjacent Disneyland to stay another day or two, preferably in a Disney hotel. It is also a riposte to rival Universal Studios, which just launched a heavily promoted thrill ride based on the movie "Transformers."

Perhaps most importantly, the revamped Disney California Adventure underscores the emergence of Pixar's chief creative officer, John Lasseter, as a key force within Disney -- as a colorful and imaginative counterpoint to the company's technocratic, financially oriented chief executive, Bob Iger.

Indeed, with the opening next week of a themed area called Cars Land, the park is fast becoming Pixar-land. Nine of 20 rides are now based on films from the computer animation company, which Disney bought from Steve Jobs in 2006.

The prominence of Lasseter and Pixar, as well as the emergence of such major franchises as Marvel Entertainment's blockbuster film "The Avengers," marks a major shift for the venerable entertainment conglomerate.

In its most successful times, "Disney magic" came largely from within. The company was run by creative executives such as Walt Disney himself and Michael Eisner, a former TV and film production executive.

Now it is counting on companies it acquired for the iconic characters and story lines that drive everything from theme park attendance to merchandise sales.

"Before Disney bought Pixar it was struggling to create its own branded content," said Davenport and Co analyst Michael Morris. "Pixar and Marvel had a lot of creative momentum that the company needed to tap."

Today, Disney allows creative executives at both Marvel and Pixar to operate largely autonomously at offices miles from Disney's Burbank studios.

As part of the Pixar acquisition, Lasseter, who once worked as a Disneyland guide, was also named "principal creative adviser" to Walt Disney Imagineering, the company's super secret design unit for its theme parks.

Lasseter took the stage in New Orleans for Disney's first annual meeting following the deal, dressed in his trademark loud Hawaiian shirt, for a 20-minute speech that rambled from his childhood when he rushed home to watch Bugs Bunny cartoons, to the movie "Cars," which he was then directing.

It was Iger who suggested the idea of using "Cars" rides in the California Adventure park, according to people involved at the time. It was Lasseter who flew in for twice monthly meetings from Pixar's Emeryville, California, headquarters to brainstorm with the Imagineers to make the rides come to life.

Lasseter's creative chops beyond animation will be put to their first big test at Disney California Adventure. The park has suffered from poor attendance since its 2001 opening, with patrons complaining of too few attractions at too high a price. Even with two-for-one specials and other promotions, just 6 million people spun through its turnstiles in 2011, compared with 16 million at the company's flagship Disneyland next door, according to the Themed Entertainment Association trade group.

"It was a bit of a brand eyesore," Iger told an investor conference in May. "We had a park that was not up to the standards that Disney parks need to achieve. Its return on invested capital for the initial investment was not that impressive."

A decade ago, theme parks were the company's most profitable unit, with operating margins of 18 percent. This year, profit margins slid below 13 percent as the company spent to overhaul the California park and expand elsewhere, according to Disney's latest SEC filing. That puts it behind the TV, movie and consumer products units.

The parks' importance extends beyond their direct money-making capacity. Rides, shows and strolling characters provide marketing muscle for Disney movies, TV shows and merchandise, and build the aura that helps make Disney a part of so many families' lives.

In remaking California Adventure, Disney replaced rides based on the California lifestyle with attractions such as a moving shooting arcade ride based on Pixar's "Toy Story" and a ride based on its "Monsters, Inc." film.

Disney used part of the park's parking lot to create the 12-acre Cars Land, based on Pixar's 2006 hit movie. Rides include Radiator Spring Racers, a roller coaster-style ride in which convertibles speed past mountain and desert landscapes reminiscent of the film's setting.

Luigi's Flying Tires puts riders in tires that float on air jets. Mater's Junkyard Jamboree offers a tractor ride similar to Disney's twirling teacups. The area includes themed restaurants and shops selling "Cars" toys and related merchandise.

Disney's overhaul "will make the park more Disneyland worthy," said blogger Jim Hill, who writes a popular Disney fan blog. "But for $1 billon it won't move the needle that much."

Hill says it takes 10 to 15 years to create characters that resonate with the parents who visited as children themselves and now want to share with their own kids. "The Disney zeitgeist doesn't happen overnight," he said.

To promote the revamped park, Disney is spending lavishly on TV commercials and billboards. A grand-opening party will feature a celebrity-studded red-carpet. Disney-owned ABC is running the original "Cars" movie on June 16.

It's an opening worthy of a big summer movie. Disney has a billion reasons to hope it's a hit.